Governors Instruct Insurers Not to Charge Hurricane Deductibles
Damage estimates increase yet again as adjusters begin to assess damage; states ask insurers to treat Sandy as a tropical storm.
Insurance Networking News, November 1, 2012
The governors of the three states hit hardest by Sandy have declared that homeowners in their states will not have to pay hurricane deductibles on insurance claims stemming from damage caused by the storm.
New York Governor Andrew Cuomo was the latest to make this announcement, saying, “Homeowners should not have to pay hurricane deductibles for damage caused by the storm and insurers should understand the Department of Financial Services will be monitoring how claims are handled.”
The deductible is standard among claims incited by hurricane damage, however, the states are asking insurers to consider Sandy a tropical storm when processing claims. Sandy was a weak category 1 hurricane when making landfall, but was quickly reduced in status to a tropical storm.
Governors Dannel Malloy of Connecticut and Chris Christie of New Jersey also said Wednesday that insurers should not apply hurricane deductibles to damage resulting from Sandy.
EQECAT has increased damage estimates for insurers to between $10 and $20 billion dollars. In terms of dollars, this would make the storm more impactful than last year’s Hurricane Irene, which cost insurers $4.5 billion. Factors for the increase are the unusually high business interruption due to large electric and utility losses, as well as the subway outage in Manhattan, which will amplify losses.
Total economic damages are now predicted to fall somewhere between $30 and $50 billion.
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